Dubai: Banks in the country target Emiratis in the hope of finding customers for big loans and this is a big factor in borrowing decisions taken by the youth, a number of Emiratis said when asked about why the community tends to spend more.

Easy loans from local banks makes it tempting to borrow more money and spend more, many people pointed out. To add to this, an individual's ability to repay debt is often not properly assessed, they added.

Douglas Beckett, Head of Retail Banking Group at Mashreq Bank, did not rule out the possibility of such loans but said the bank encourages "responsible borrowing".

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"UAE Nationals are an attractive segment for banks because employment tends to be stable, notably if they are employed by government departments — they tend to have good salaries so loan amounts can be of a reasonable size, and nationals, unlike expats, do not skip if they face debt service challenges eg. because of job loss. However, all lending must be socially responsible and within any individuals capacity to service comfortably," he said.

He added the bank, based on the portfolio performance, gives UAE nationals personal loans that are 20 times their salaries whereas expatriates can avail loans of up to 17 times their salaries. He said the difference [in the loan amounts] is "simply because the expatriates segment is high-risk due to being transitory in nature".

"The most important aspect to look at is customer's portfolio. As long as it meets all criteria and is eligible, requested loan will be granted," Beckett said.

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According to Central Bank regulations, Article 2 under ‘personal loans' specifies: "The amount of personal consumer loan has been set at 20 times the salary or the total income of the borrower and banks and finance companies must make sure that this limit is not exceeded".

Saif Al Mansouri, Deputy Head — Group Marketing, Emirates NBD, said: "As one of the largest local financial service providers in the UAE, Emirates NBD bears a responsibility to contribute to the economic growth in the country and in particular to the advancement of the Emirati population. The bank has developed a range of products and services with the objective to support Emiratis in their personal and professional growth."

Emirates NBD, however, did not disclose upto how much personal loan amounts they give to Emiratis.